We’ve heard this too many times. Way too many times. Beginning with the first salvo of articles about President Obama’s budget, the familiar refrain was there again: “…he avoids tough choices on such big issues as Medicare, Medicaid and Social Security, which together are driving the national debt skyward.”
Oh, those budget-busting entitlements. Those black holes that drain money away from active working people into the fingers of greedy geezers.
Let’s think for a moment about one of those “entitlements,” Social Security. Why “entitlement” in quotes? Because, after all, Social Security isn’t just a gift; recipients put part of their salary into it to begin with. And the benefits are partially taxable.
To give the conservative side of this argument its due, it’s true that Social Security was never meant to support people through a period nearly as long as their working lives, as it often does today. In its early years, when the retirement age was set at 65, far fewer people lived to be 65 or over than do now.
That means that Social Security is being stretched farther than those who established it intended, and that justifies some rethinking—of the designated retirement age, for example. That thinking is being done. But it needs to be done in relation to many factors, such as the demise of private sector pensions and the availability of jobs for younger workers if 70-year-olds are still at their desks, not just cliches about what is “driving the national debt skyward.”
Is Social Security draining off the GDP? According to experts at the Center on Budget and Policy Priorites, “The program’s trustees project that it is solvent until 2037, and that in the mid-2030s, when the large baby boom generation exerts its greatest demographic pressure, benefits will cost just over 6 percent of the Gross Domestic Product, up from 4.8 percent today.”
And the idea that the issue of Social Security (or the related issue of Medicare) pits old people against the young is nonsense. Young people’s prospects of supporting themselves and their children are worse now than they have been for three generations; how can they support parents, many of whom are facing retirement without pensions? Not many young people, even the most alienated, are willing to see their elders hungry, homeless or sick without care, but they would have to impoverish themselves to prevent that if it weren’t for Social Security (and Medicare).
Because of that, as well as the fact that Social Security recipients spend their benefits quickly and close to home, the support the program provides for the entire economy is something we overlook at our peril.
